Starting a business with a business partner may seem like a great idea because two heads are always better than one. However, that business relationship you created in the beginning could soon go south and lead to potential disputes that could cost you thousands.
If you’re dealing with a business dispute, here are eight things you can do to settle the matter:
1. Know Your Rights: As a business partner, you’re going to have rights. Take a close look at your shareholders, partnership or LLC agreement to see who owns the company, who runs certain parts, how profits are allocated and so forth. If these documents don’t exist, then you’re going to want to check with your local laws to see how they are going to fill in the blanks. Keep in mind, though, that even if you have everything laid out in an agreement, your partner may interpret things differently than you do.
2. What Do You Want? In your ideal world, you’re going to want to ask yourself what you ultimately want to happen. Do you want to reduce conflicts? Are you interested in buying out your partner? Do you want to sell the business? If this dispute were to go to a court case, you would enter something known as the “interest conversation,” which is the process of discussing your possible resolutions with the mediators. Write down your goals and see what it’s going to take to get to that point.
3. Get the Paperwork in Order: If you happen to push your partner’s buttons the wrong way, a complicated court case could be in your future. Since you don’t want to show up to court empty handed, it’s so important that you have all your paperwork in order. Some of the most common reasons business partners head to court include: business fraud, conversion and breach of fiduciary duty. Keep in mind that some angry partners may do everything in their own power to make you look at bad as possible, so if you don’t have a business dispute lawyer like this yet, it’s advisable that you hire one ahead of time so that you can prepare for the potential case.
4. Keep Going: As miserable as you may be, it’s important that you continue to run your business. If you fail to show up and run the operations, you run the risk of the business failing, and you could end up tarnishing your credibility because you walked away from the situation and didn’t try to resolve the conflict.
5. Be Practical: Of course, the most logical step to take when dealing with a conflict is simply by talking to your partner. If you don’t feel comfortable talking face-to-face, then it would be advisable to hire an attorney to oversee the meetings. If your communication has decayed to the point where you don’t even want to talk, then it would be ideal to use a lawyer or mediator as a third-party to convey your messages. A simple meeting can often resolve many issues before heading to court, saving you thousands of dollars in legal fees.
6. Don’t Be Emotional: If your disputes revolve around a personal opinion, there could be a good chance you’re going to take it personally. During any dispute, never let your emotions get in the way. You’re going to want to run the business run as usual and try to resolve the conflict in a professional way.
7. Keep Things in Writing: If you were to resolve your conflict or make progress, always make sure that you get things in writing. Getting any agreement in writing is going to be a lot stronger than a verbal agreement if your partner were to change their mind in the future.
8. Get Legal Advice: Even if you don’t feel the conflict is going to go to court, it never hurts to get legal advise from a local lawyer. Getting legal advice as early as possible can potentially stop your partner from stealing clients, damaging the business or even removing assets without your permission.
Any sort of conflict can put a large damper on your business. As soon as a dispute starts to arise, it’s important that you take the steps mentioned above to resolve it as soon as possible.